CEOs who Fail to Set Context Fail their Organizations

Imagine this situation: you’re at work, doing your job when your boss walks up to your desk. He says he wants you to take the stairs to the 40th floor.

You’re confused, but you oblige — after all, it’s a request from the boss. However, on the 39th floor, he calls you and tells you he now needs you to take the elevator to the lobby. Not only does he not let you finish the task he gave you previously but now wants you moving in a completely different direction, using different means.

Do you want to be that kind of boss?

The CEO’s JobThis example might seem like it’s coming out of left field but less extreme instances of this type of boss behavior happen on a daily basis in many organizations. It is the consequence of a lack of departmental direction, and ultimately, of a CEO failing to set the context for the company.

Even when the organization focuses on one goal (for example, growth), there are various ways of accomplishing it. Additionally, different departments in the company might go about achieving that goal in a variety of ways. Not only that, but the immediate goals of different departments sometimes compete with each other. These inner workings of a company are what can create confusion and lack of direction. It’s the CEO’s job to prevent that from happening if he / she wants to be effective.

Leading by Setting ContextIf we look at an organization as a whole, we see that each employee’s focus is much narrower than that of the CEO. Each of CEO’s subordinates prioritizes based on their duties and expertise. The CFO is excellent at finance, the COO can manage the operational side of the business, and so on. Each truly and rightly believes what they do is critical for the organization’s success.

A subordinate’s view of what needs to be accomplished is framed by the internal aspects of getting their job done. However, that doesn’t hold true for the CEO. In the words of Peter Drucker, “the CEO is the link between the Inside that is ‘the organization,’ and the Outside of society, economy, technology, markets, and customers. Inside there are only costs. Results are only on the outside.” In this context a CEO must know how to balance and integrate both the outside and the inside of a company’s experience.

The CEO is the only one that can decide whether a financial procedure has to take a back seat to operational expediency; when what’s best for finance is not necessarily best for operations; what is best for sales might not be best for production. It is the CEO, and only the CEO, who can decide what is best for the organization as a whole. If the CEO does not make definitive choices that support clear priorities, employees can feel whipsawed: if it isn’t important to the boss, then how can those he or she relies on be expected to make it a priority?

How does a CEO accomplish clear prioritization? That is where context and taking a holistic view of the organization come in. The CEO, with a higher level view, sees opportunities that others can’t see. By being in touch with the inner workings of the company but also understanding and experiencing the outside, a CEO can ensure proper and accountable management of their company.

Since the CEO is the only person with the capability to lead the organization by setting the context, it’s imperative for them to be aware of this requirement and find time to do this work. This is the CEO’s exclusive accountability. No-one else has the same holistic organizational perspective. If the work is left undone, it falls to subordinates to try to negotiate a resolution to differences of opinion on priorities. This results in trade-offs that may not be in the best interests of the organization. By being accountable for the organization overall, a CEO can ensure that subordinates make the right decisions about what’s best for the organization.

About the AuthorDwight Mihalicz helps organisations improve performance. He focuses on manger effectiveness, ensuring that all managers, from the CEO to the front line, are focused on their key strategic priorities and have the accountability and authority required for success.

Dwight has founded and is President of Effective Managers™, a management consulting firm based in Canada, providing services globally. The firm uses the Effective Managers™ Survey to assess manager effectiveness, and The Effective Point of Accountability® to help organizations focus managers on the right work while breaking down silos.

He was recently elected as Chair of (CMC-Global), established in 49 countries, and through the Global Institute in every country of the world. To learn more about Dwight's work, visit: http://www.effectivemanagers.com/

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